Britannia Radio

Steve's note: My colleague and friend Porter Stansberry recently published an incredibly important piece of research. And he agreed to allow me to share it with DailyWealth readers. We'll be running his ideas all this week. I should note I don't agree with all his points, but I think Porter is presenting ideas every American should be aware of… A Serious Warning: The Facts Behind America's Coming Collapse By Porter Stansberry Monday, June 6, 2011 On May 11, the U.S. Treasury updated the public on our federal government's finances. So far this fiscal year (which began October 1, 2010), the feds have borrowed nearly $1 trillion. April marked the 31st  consecutive month  of deficit spending at the federal level. It did not matter that tax receipts have rebounded substantially – growth in spending  on social programs has far outpaced the increase in revenues. In total, President Obama's economic mandarins now forecast the fiscal year 2011 deficit will come in at $1.6 trillion. To put this figure in perspective for you, when Ronald Reagan took office, the entire national debt totaled less than  $1 trillion. Even as late as 2002, the national debt was only $6 trillion. Obama's administration will almost surely  borrow more than $6 trillion in only his first term. In four years, Obama will double our entire national debt from  its pre-financial crisis levels. This has never happened in peacetime.  Keep in mind, this is the same president who, after taking office in 2009, held a widely publicized Fiscal  Responsibility Summit and pledged to "halve the deficit we inherited" by 2013. The budget deficit in Bush's last year in office (the 2008-09 calendar year) was $1.2 trillion – due largely to the  Wall Street bailout and Iraq war. Today, both of these major sources of spending have largely disappeared. The government is selling assets acquired  during the financial crisis. That generates revenue. Yet rather than decrease the deficit, Obama has allowed it to grow  by 33% annually. This same man, while a U.S. senator, called 2006 efforts to raise the debt ceiling "a sign of leadership failure." He voted  against raising the debt ceiling to $9 trillion, proclaiming, "Americans deserve better." Obama noted, accurately in our  view, these mounting federal debts were "shifting the burden of bad choices onto the backs of our children and  grandchildren." We hope history will hold Obama accountable for his actions. But we're not holding our breath. Federal, state, and  local government spending now makes up about 45% of the U.S. economy. Hardly any major business in America  doesn't count on the government for a significant amount of its earnings. While we used to call this kind of system  "socialism," today the popular term is "crony capitalism." Whatever you call it, it leads to collapse. Another worrisome sign? A record number of people (almost 70 million) now depend on the U.S. government for  their daily housing, food, and – most of all – health care… Today, 45% of American households receive some form of direct government payments. And 132.5 million people  pay no federal taxes whatsoever – a record number of people who neither paid federal income taxes in 2010 nor were  claimed as a dependent by another taxpayer. Tallying up all these numbers, you discover something amazing. A tiny number of Americans pay for the well-being  of nearly a majority. While half of the population may pay something in taxes, only the top 10% – people earning  more than $113,000 – pay a substantive amount. These few citizens pay 70% of all the income taxes collected. Benefits funded this way are unsustainable. According to a recent study published in the Wall Street Journal, the  average couple that retires at age 66 on Social Security and Medicare will receive $1 million in benefits. On average,  they and their employers paid $500,000 into the system. The federal government is taking an excessive amount of money from its few high earners – a wealthy minority –  and redistributing inefficiently to pay for services the country can't realistically afford… Individuals, of course, are not the only beneficiaries. Entire industries gush cash thanks to the generosity of the federal  Treasury – mortgage REITs, defense companies, and most of the health care complex. The system is so broken, not even the already lopsided payment scheme is enough. Not even close. Every week we  hear more demands for the "rich" to pay their "fair share." The political reasons for spending are so powerful, until  the government can take more from the rich, they will continue to borrow it from somewhere else. Any American with the ability to balance a checkbook can discern the serious nature of this financial situation and  the politics that explain its origins. Yet in the battle between political expediency and financial probity, the lust for  power will always win. So what can we do to protect ourselves as the borrowing and spending continues to accelerate? Tomorrow, I'll show  you the first step to take. Good investing, Porter Stansberry P.S. For most Americans, we fear the next year will be a disaster. But I've been preparing my readers for this for more  than two years now. With plenty of gold stored away and a portfolio well-positioned for the coming collapse of the  U.S. dollar, we watch it from a comfortable distance. We hope you're in the same position. If you'd like to join us,  click here. Further Reading: If you're interested in hearing more on the challenges America is facing – and doing something about them – check out the Project to Restore America. "The system we have today has delivered us to the doorstep of national bankruptcy," Porter says. "I believe that  unless we reform the way we govern our country, we will lose the liberty that is our birthright as Americans." Read Porter's full Project to Restore America manifesto here.